If you are not new to real estate market, you will notice that the market tends to be either hot or cold in a given season. The more inventory in the market enough for a five months worth of home transactions or real estate property auctions taking place in every corner of the city is an indication that the market is cold. On the flip side, only a handful of open houses with house full of potential buyers at each one of them means that the market is hot.
Real estate market can also be in a balanced state. In a balanced market, it is not too hot or cold which means there are almost equal number of buyers and sellers. Prices are not rising or lowering either. At some point though, the prices may seem like the market is heading toward a hot season as many home buyers become motivated all at once. Other times, it may appear that the cold season has arrived, as many sellers decide to place the house for sale. The inventory also remains reasonable in a balanced market, giving an impression of a tight-nit community with little room for expansion.
With that being said, whatever season you are in, you need to know certain things that will help you understand the market in a better way. For example, looking at recent sales will give you an idea of where your house stands, and what homes like yours are actually selling for. This is called comps in real estate lingo. Knowing your comps means, a house similar to yours, in or near your neighborhood got sold recently for a certain price. That price will be a base or standard price for the house you are selling. Add to that price the cost of renovating your kitchen from top to bottom. Add also the cost of new carpet in every bedroom that your installed recently. Furthermore, you can also add the price of those expensive pottery set that you plan to leave behind for the lucky buyer of your home sweet home. And don’t forget about the new energy-efficient HVAC unit that has lowered your monthly utility bill to a significant level. All these additions along with the standard price will be your approximate asking price for the house.
The word approximate is used here because certain other things add value to your property. For example, if your house is in a neighborhood that is considered to be desirable among home buyers, you can justify that high price. Or if the house is one of the few Victorian style buildings left in an area surrounded by new developments, there is no reason why you should not raise your asking price. What if the house is the only one available for sale in your community? That is also valid reason for a particular asking price. In essence, you are likely to get multiple bids when the house is rightly priced based on availability, market condition, desirability, add-ons and additional features that you throw in.